Things get ugly at Tuesday Morning

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DALLAS — A lawyer representing former Tuesday Morning CEO Kathleen Mason asserts the closeout retailer fire her upon learning she was diagnosed with breast cancer.

Kathleen Mason, the former President and CEO of the Dallas-based, closeout retailer, has filed charges of disability discrimination against her former employer with the Equal Employment Opportunity Commission (EEOC).

In the filing, Mason said she was removed from her leadership role in June after disclosing to the Tuesday Morning board that she was battling breast cancer. Mason led the company to 12 consecutive years of profitability before her firing.

“Current quarterly estimates were down at the company, but this is a woman who had proven to be a more-than-effective leader and prepared the company to weather the current economic downturn,” said attorney Rogge Dunn of Dallas’ Clouse Dunn LLP, who represents Mason.

Dunn notes that Tuesday Morning had been profitable every year Mason led the company, and that the company has no long-term debt. During her tenure, private equity investors led by Madison Dearborn saw an initial investment of approximately $117 million grow in value to more than $700 million, says Mr. Dunn.

“Given her record, this is someone any company would want leading them through these challenging times. But instead, the board’s attitude toward Kathleen changed after it learned of her breast cancer diagnosis and treatment,” he said. “But those who know Kathleen know that she would never allow her health to become a corporate liability.”

The severance package offered to Mason emphasized medical benefits and included a 10-year consultancy clause, after which an 18-month non-compete clause would begin, in effect locking her out of working elsewhere for nearly 12 years.

“The board made it clear she was not being fired ‘for cause’ and the company wanted to retain her expertise for another 11½ years. One has to question why she was removed from her job,” said Dunn.

At the time of her dismissal, Tuesday Morning announced that it "relieved Kathleen Mason of her duties as president and CEO" and did not comment on her performance or the reason for the decision.

"The board of directors concluded it was the right time to transition leadership to a new executive who will guide the company through its next stage" said Bruce Quinnell, the chairman of the board, in a press statement.

Late Friday, Tuesday Morning commented on Mason's claims, saying that her termination was lawful and made in conformity with the terms of her employment agreement. The company said it believes that any claims relating to her termination are without merit and intends to vigorously defend any such claims.